Reporting Roth 401K account with Solo 401K ?

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Topic Author
RIMDBogle
Posts: 115
Joined: Thu Jul 12, 2018 10:13 pm

Reporting Roth 401K account with Solo 401K ?

Post by RIMDBogle » Mon Mar 11, 2019 9:00 pm

Reporting Roth 401K account with Solo 401K ?
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Thanks for your replies to my threads.

I did review some threads on above subject, but need some insight on above subject.

Solo 401k contribution limits for 2019, you can elect to defer up to $19,000 of your pre-tax income in elective contributions. (EmployE Contribution)

On top of the $19,000, as the employer you can also make a non elective profit sharing contribution up to 25% of your pay (which would be based on your W-2) (EmployER contribution).

I learned that EmployE Contribution can go to Roth 401K or regular solo 401K account, but EmployER contribution can only go to regular solo 401K account.

Roth 401K shows up with Code AA in box 12 of W2

regular solo 401K shows up with Code D in box 12 of W2

The Total Solo 401K contribution reported in 1120S of Line 7 part of wages & salaries of greater than 2% shareholder of S Corp.

Are there any other reporting required to cover Roth 401K $?

What are the pros & cons of having Roth Contribution in Solo 401K? :idea:

Thanks for your guidance.

Spirit Rider
Posts: 10032
Joined: Fri Mar 02, 2007 2:39 pm

Re: Reporting Roth 401K account with Solo 401K ?

Post by Spirit Rider » Mon Mar 11, 2019 10:14 pm

RIMDBogle wrote:
Mon Mar 11, 2019 9:00 pm
The Total Solo 401K contribution reported in 1120S of Line 7 part of wages & salaries of greater than 2% shareholder of S Corp.
This not correct. Line 7 should be the same as your W-2 Box 1 wages.

Think about it. When you were a W-2 employee at prior employers. Traditional 401k employee deferals reduced your W-2 Box 1 wages. Employer contributions were not included in Box 1 wages. It is not any different for an S-Corp 2% shareholder-employee.

Both employee defferals and employer contributions are reported on Line 17.
Are there any other reporting required to cover Roth 401K $?[
Roth 401k contributions are not deductible and are only specifically reported on your W-2 Box 12 Code AA.

When a one-participant 401k balance is > 250K on 12/31. You must file Form 5500-EZ which will include all contributions including designated Roth contributions in the year's contribution total.
What are the pros & cons of having Roth Contribution in Solo 401K? :idea:
The same as the traditional IRA and Roth IRA decision. There is much written on this decision. See the Wiki or do your own research.

Topic Author
RIMDBogle
Posts: 115
Joined: Thu Jul 12, 2018 10:13 pm

Re: Reporting Roth 401K account with Solo 401K ?

Post by RIMDBogle » Tue Mar 12, 2019 9:05 pm

Thanks for your reply.

Even though Traditional 401k employee deferrals tax FREE, but it attracts Medicare + SS tax.


For 1120S Line 12 . Tax and Licenses

Do we able to deduct Medicare tax 2.9% SS Tax 12.4% for Traditional 401k employee deferrals as Tax and Licenses or only 50% of these tax go as Tax and Licenses (line 12 of 1120S) ?

As I review the threads in this forum for S-Corp/Solo 401K, I find the following

Code: Select all

                                                 SS (FICA) and          Federal 
                                                 Medicare               income tax
Employee elective salary deferrals – pre-tax         	Yes	           No
Employee elective salary deferrals – Roth	        Yes	           Yes
Employer matching and non elective contributions	No	           No
Wages/Salary                                            Yes                Yes
S Corp dividend/distribution                            No                 Yes  
As per above matrix

Are there any other advantages apart from tax free withdrawal for Roth 401K Contribution?

How do I allocate in above matrix of 150K S-corp gross receipt (1120S 1a) for optimal tax savings?

Thanks for guidance.

Topic Author
RIMDBogle
Posts: 115
Joined: Thu Jul 12, 2018 10:13 pm

Re: Reporting Roth 401K account with Solo 401K ?

Post by RIMDBogle » Wed Mar 13, 2019 9:04 pm

Bump up

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